Live Streaming Service Introduction and Optimal Contract Selection in an E-Commerce Supply Chain

Live streaming selling is an emerging and thriving practice in online retail, enabling manufacturers to reach a broader market. However, it also entails significant commissions paid to streamers, which may erode manufacturers' profits. Therefore, it is significant to study the conditions under which manufacturers should introduce live streaming services. To address this question, this paper takes the traditional promotion model as a benchmark and develops two influencer live streaming models under the revenue-sharing contract and the flow-based contract. Findings indicate that the manufacturer can perform better in any of the three models under certain conditions. When the basic remuneration coefficient and the traditional promotion cost coefficient increase, the manufacturer suffers from choosing the traditional promotion model and the influencer live streaming model under the flow-based contract. In contrast, the increase in the streamers' flow effect can make the manufacturer more willing to choose the influencer live streaming model under the revenue-sharing contract. The streamer's preference for contracts is contingent on the basic remuneration coefficient, while the retailer can benefit from the influencer live streaming model under the revenue-sharing contract. Moreover, we consider the positive spillover effect of traditional promotion in extensions. The results show that this effect can enhance the manufacturer's motivation to choose traditional promotion, but it does not fundamentally change the model preferences of channel members.